Seniors will see changes to Social Security in 2025 and 2026 that impact the retirement benefits they're eligible to receive. After 2026, though, the changes occurring over the next two years will not happen again -- unless lawmakers pass new legislation that's likely to be unpopular.
Here's why future Social Security recipients must cope with a big, unpleasant change for the next two years -- most likely for the last time.
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The change that's happening in the next two years
First things first: What's changing in 2025 and 2026?
It's the full retirement age, or the age at which retirees can claim their standard Social Security benefit and not be penalized for filing early. Here are the specific modifications that are occurring:
- In 2024, for anyone turning 66 this year, the full retirement age is 66 and 8 months. This is the FRA for people who were born in 1958.
- In 2025, the FRA is moving to 66 and 10 months for anyone who turns 66 next year. That's because the FRA for anyone born in 1959 is two months later than for people born in 1958. Those seniors with the later birth year must wait longer to get Social Security if they want to avoid reducing benefits for life.
- In 2026, the FRA is moving to 67 for anyone who didn't already turn 66 in prior years. This FRA applies to everyone born in 1960 and later.
Since the FRA is staying at 67 for anyone born in 1960 or beyond, it will no longer change for newly minted 66-year-olds starting in 2027. Everyone who turns 66 in 2027 or after can get their full retirement benefits at 67 with no penalties.
Unless lawmakers act, the FRA is set in stone
It's good news for future retirees that the FRA stops moving later after 2026.
The reality is that the full retirement age used to be 65 for everyone. However, lawmakers pushed it back when they amended Social Security in 1983. They phased in the change at the time. So, even though the modifications to the program were made decades ago to try to make Social Security more financially secure, retirees today are the ones facing the consequences of the legislation.
When lawmakers back in the 1980s pushed the full retirement age back, this was a de facto benefits cut for future seniors. Look at it this way. You're left with either waiting longer to start collecting Social Security (thus not getting any checks during the delay) or having your check reduced. No matter what, you'll get less lifetime income than someone who lives as long as you do and who was able to get their full benefit months or years earlier than you could.
Once the FRA stops moving later after 2026, there's a good chance this change will never happen again.
Some lawmakers have indeed proposed moving the full retirement age again to help deal with the current financial struggles Social Security is facing, as the program's trust fund could run dry by 2035. However, this policy proposal is, unsurprisingly, not popular. Getting enough support for it at a time when party leaders on both sides of the aisle have voiced their support for avoiding Social Security cuts would likely be difficult.
For now, at least, future retirees are probably safe from a change to the FRA and can take heart in knowing that after 2026, they probably won't see it pushed back any further.
